Hey guys as the title suggested I am a beginner at forex. When I first begun I had some major wins, which I have to admit made me really arrogant. It didn’t take long since I lost pretty much everything (don’t worry it was a demo lol xP) Since then I have lowered my expectations (and my leverage hahah).
I am currently studying computer science, however will probably have lots of time during this summer, and around two hours per day after university starts again to dedicate on forex. I was wondering what expectations should I have for my first year trading (profit, return percentage etc?)
Also I wanted to ask some of you for any further advice you are willing to give to a beginner. I am almost done with babypips education courses. After that, what?
I would say that is about the last thing you should be thinking about at this stage.
As you have already discovered, it is very easy to win and lose everything. Whilst markets are erratic and volatile by nature, you have to learn how to be consistent and methodical. That is not easy.
You need to make some broad decisions and determine some parameters which broadly define your trading, for example:
are you trading intraday, swing trading, positional trades.
are you basing your trades on fundamentals or technical analysis, discretionary or mechanical
which pairs are you trading and in which sessions
what criteria define your trade entries
what criteria define your exits (targets, stops, trailing stops, reversals etc)
what capital you have
how much risk per trade, how many open positions
In this way you avoid the temptation to jump from one trading approach to another and instead to gradually evolve your own consistent method - and then trade it with patience and discipline and a journal.
Then you need to build your confidence ( a very different thing to arrogance! ).
…….and after all this I think the profit level with take care of itself…………
You need to spend some time (months, years) looking at the charts. That’s the next step.
It’s time to develop a strategy (price action let’s say) to practice. At this stage, it’s not about making money.
Don’t focus on too many pairs. I only focus on one pair, the EURUSD. I also have a look at oil and gold prices, and some other major pairs just to see what’s going on, but I only trade and focus on EURUSD. Don’t want to be confused and overwhelmed.
You can learn from other people. Don’t take their advice and speculations granted but you do learn from them.
Every day you should dedicate a couple of hours to Forex trading without any interruption.
So… read news daily, look at the charts (your favorite pair, should be a major pair), read the forums, talk to other traders.
And like I said before…
“Don’t use high leverage, don’t be greedy, don’t freak out if it goes against you, use SL and TP, don’t monitor your trade too much, take a break, don’t get upset, and don’t lose motivation.”
"If you truly love Forex trading then you’re not only here for making money… "
Thanks for you answer! I had another question about SL actually. I have noticed that when I don’t use high leverage (so that I don’t get margin called before the trade turns in my favour) and my margin percentage is high, it is pretty certain that if I wait long enough (could be 1 hour, could be 3 days…) , I always turn to win something out of that trade. I use to do that a lot when I want a slow win, however sometimes when I spot a better trade opportunity or a more certain one, I might close the position to free up margin, even though it might be a losing one for the moment. It might be dumb but I’m just a beginner so I’d appreciate your opinion on that. Thanks again!
This suggestion has been raised quite often here on BP.
It is true that very often prices range and cover the same ground over and over again, and that if one waits long enough there is a good chance that a position will eventually make a profit…BUT!!!..…………
…There are also times when markets make more structural changes and the trend just keeps on going. In these circumstances you can get left with a position that will not turn and may even continue in progressively greater losses for years, even decades!! During this time you will need to keep increasing your margin to cover the increasing losses.
This means you are less able to take other trades, your concentration is diverted to this losing trade, and you may even run out of money and see your positions closed automatically by your broker and your account dried up.
In my opinion this goes entirely against the concept of being a trader. Even commercial enterprises will acquire goods at a price which they believe can achieve a pre-determined profit. If they don’t, then they sell at a discount, even with a loss, and free up capital to acquire other goods. They do not just hang on to them in the hope that one day they might sell.
A trader should do the same: identify an appropriate entry point and, at the same time, know where or under which circumstances they will take a profit…and at which level they will consider the trade wrong and quit and move on. These stop levels may be either a mental understanding or a physical market stoploss entry. Personally, I would always recommend a stoploss order at some level even if it is only a so-called “air bag” or disaster stop in the case of sudden hyge moves that occasionall occur.
Yes these all points are considerable , every trader should know risk reward ratio he can gain from forex business. How much he should expect as realistic profit. High profits are not possible every time you trade , set such goals that can make you easy in trading not get tense just make a plan according to your capital and skill.
Definitely not a fan of selling some EAs to beginners. Not cool.
For first year a good success, if you can manage to be at zero or with only slight loss while being active trader. So, if you have a strategy, idea or just place trades by your guts and do this regularly throughout the year and get to 0 at the end - this was a good first year considering how many traders go broke or lose painful percentages of their capital - it is unreasonable to expect profits as a beginner. Learn to not lose too much.
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considering how many traders go broke or lose painful percentages of their capital - it is unreasonable to expect profits as a beginner. Learn to not lose too much.